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Day Rate Calculation for Freelancer and small teams

‘I am a new designer, IA,
consultant, etc. … and I need to know
how much I can charge for my daily or hourly rate. Should I just charge what others are charging?
Is there a reliable approach or method calculating my rate? ‘

The interactive media business is a
very competitive area to work in, and indeed very often clients (employer or
agency) are trying to set the price.

The daily or hourly rate depends on
various factors …

General factors

The market rate

Holiday season (e.g. betweenChristmasandNewYear)

Project factors

What kind of professional is
required – Junior, Senior, Specialist, …

What
experience are needed for the job

Where is the job located – off-site
or on-site – big cities like Paris, London, New York London pays higher hourly
rates,

For how long is the job or how
frequent

Does the client (agencies often do)
claim working overtime hours (night and weekend work)

Is an emergency or a speed job to be
done

Your factors

How experienced you are

How unique your skill set is

Your ability to negotiate

However,
if you are or you
consider becoming a freelancer, I firmly suggest determining your day rate. You
should know the true value of your time and calculate what your daily or hourly rate should be to enable you to work
freelance. Moreover you should calculate ‘your price’ because especially young
professionals forget making provisions and reserves for contingencies and for
pension,disability pension and insurance.

1st step

First of
all you have to keep in mind a freelancer will work a maximum of 220 days a
year . But in general these 220 days aren’t realistic. When we will calculate
the daily or hourly rate we can just count chargeable days. You will lose days
for obtaining and acquisition, book-keeping and accounting, meeting your
tax-consultant etc. and don’t to forget
days for vacations, attending conferences and training and last but not least sick days. And let as
be honest there will be again and again time when you have no work.

At the end
of all you should calculate with 200 or 180 chargeable working days, and you
should be honesty to yourself, how often are u sick or you feel sick and you
aren’t as powerful and creative as you’re usually. – By the way a lot of companies count with 180 days.

Use the following suggestions as a
guide and then modify to suit your circumstance and conditions.

2nd step - total business costs per year

2.1

x,xxx.xx $ (€) annually … for … office / room(s) rent

(even
if you work in your private flat you should calculate percentage of home rent
or renovation costs, electricity bill, etc. )

(Legal,
Organizations and or professional associations, - Some fees are annually but
some fees will happen as one off blocks
usually right at the beginning. If this is the case try to divide the cost over
2-3 years to get an amortized amount., etc. )

When all is said and done you have
to keep that in mind, the aim of the business is making a profit, because you
do it for living and your family, to pay bills and one or two things that make
fun.

On the one hand you should know what
is your ‘ideal hourly rate’ and in any case your 'break-even hourly rate'.

If you can't beat certain
competitors on price then quality of service and the personal touch to your
clients will often make the difference.

BUT on the other hand you should
know for what kind of business you will never work …

e.g. for ethical reasons

( I declined several times projects
offers regarding investment funds - The aim of these projects
had been to support and to promote hedge funds or short
sale funds* and funds that deal with basic foods and drinking water.)

‘A business that makes nothing
but money is a poor business!’Henry Ford

‘A man may be born a jackass; but it
is his business if he makes himself a double one!‘Martin H. Fischer

PS: short sale funds* = in Germany better known as ‘Leerverkäufe’ or ‘Blankoverkäufe’

Form my German Colleagues I have a Link to
a real good Day Rate Calculator:

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